Final thought on this topic. Spoofing is currently illegal but should be made legal as there is nothing inherently wrong with spoofing. It is an alternate technique that would bring balance to the market as compared to what it is now: HFTs front running orders by a penny or sub-penny.
So the authorities caught the code writer. Gee, some big fish I can see. I wonder just how strong the case against him can be, after all if I make a gun for you, it is you who decides what is it good to use for. He could also use the "I didn't know it was illegal, Nav told me it was OK" defense. Not a super good argument, but Nav threw him under the bus so I don't see why he should be loyal to him. Nav is still going to get screwed and already poor, by the time he comes out of prison the UK authorities might not even want to prosecute him for tax evasion.
What everybody is missing in the Nav case is that on the day of “the flash crash” he submitted 20M messages to the exchange ES order book and the entire balance of the ES market participants submitted 19M messages to the exchange. IMO the CME referred this case for prosecution, and they are simply not going to allow their ECN’s to get gamed and disrupted and overloaded without getting compensated for it vis-a-vis fills.
IIRC he only traded for an hour on the day of the crash and turned it off by the time the crash occurred. Kind of hard to blame it on his algo... Also he used it before and later on, so it should have caused similar crashes on other days. I am not saying he wasn't unnecessarily overloading the system, but he didn't cause the crash.
I really hope he goes to prison. not just because spoofing. He lived with his mom who had to work two jobs while he had 30M$ in the bank and didn't lift a finger. he's a nutjob!
I thought he was out on bail at the moment? And cause he has been grassing everyone up, he might never go back.